Graphs That Show Why This Is Indeed Quite Possibly a Depression
Many have often referred to the period of economic malaise that began around 2000 with the bursting of the stock/tech bubbles and subsequent implementation of Bushnomics as a sort of modern day take on the 1920s all over again (a nasty recession early, followed by unchecked credit expansions and rampant speculation creating false wealth through the remainder of that decade, masking underlying weaknesses, culminating in a crash). No surprise then that if that was a fair comparison in many ways, the 2010s would at least in part follow the 1930s (and I think most reasonable people would agree that it has - with the exceptions of a far more timely and globally-organized response).
But also unlike the 20s & 30s, many reasonable comparisons have been made to Japan's Lost Decade(s) following the massive bubbles in that great nation, and the Long Depression the US suffered from the 1870s until the end of the 20th century.
I have often referred to "The Great Recession" as a Moderated Depression, because the numbers follow that of a classic Financial Panic-driven Deep Recession (aka: Depression), but one in which we have had unprecedented global intervention, this time.
What might one expect this Moderated Depression to look like, then?
How about:
1) Persistently high unemployment.
2) Asset deflation with or without consumer price inflation or consumer price deflation.
3) Persistently weak and/or non-existent GDP growth - if not outright contraction - for a long period of time and/or a period of much more frequent recession and far shortened expansions.
US Real House Prices & Recessions
Chart credit: Calculated Risk
Employment Losses & Rebounds GREAT RECESSION vs. All Other Post-WWII
Chart credit: Calculated Risk
US GNP Unadjusted for Inflation (x-"deflators")
Chart credit: FRED
But also unlike the 20s & 30s, many reasonable comparisons have been made to Japan's Lost Decade(s) following the massive bubbles in that great nation, and the Long Depression the US suffered from the 1870s until the end of the 20th century.
I have often referred to "The Great Recession" as a Moderated Depression, because the numbers follow that of a classic Financial Panic-driven Deep Recession (aka: Depression), but one in which we have had unprecedented global intervention, this time.
What might one expect this Moderated Depression to look like, then?
How about:
1) Persistently high unemployment.
2) Asset deflation with or without consumer price inflation or consumer price deflation.
3) Persistently weak and/or non-existent GDP growth - if not outright contraction - for a long period of time and/or a period of much more frequent recession and far shortened expansions.
US Real House Prices & Recessions
Chart credit: Calculated Risk
Employment Losses & Rebounds GREAT RECESSION vs. All Other Post-WWII
Chart credit: Calculated Risk
US GNP Unadjusted for Inflation (x-"deflators")
Chart credit: FRED